January 8, 2014

Thousands of Additional Trucks Expected on Brazilian Highways

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The combination of a record large soybean crop in Brazil and restrictive driving regulations is expected to result in tens of thousands of additional trucks put into service hauling the grain from production fields in the interior of the country to ports in southern Brazil. Since 60% of Brazil's grain is transported by truck, the already crowded Brazilian highways are expected to be even more so when the harvest begins later this month. Fifty thousand additional trucks are expected to enter the freight hauling business this harvest season bringing the total in Brazil to more than three million units.

Brazilian trucking companies are expecting a brisk business this harvest season due to the expected record large soybean crop and the new truck driver law that took effect a little over a year ago that limits the number of hours a driver is allowed to be behind the wheel between mandatory rest periods. There are estimates that the new truck driver law alone could reduce the number of hours driven by an individual driver by up to 20%.

As a result, trucking companies are looking for ways to keep the trucks on the road in spite of the mandatory rest periods. The most obvious solution is to add an additional driver to the cab or to arrange for drivers to be switched out at truck stops along the major highways leading to the ports. The truck driver law has resulted in many owner/operators to focus only on short hauls instead of the long hauls from the interior of Brazil to the ports in southern Brazil.

In anticipation of a lack of trucks during the harvest period, many large farmers in Mato Grosso have been contracting trucking companies for months to insure the needed truck transport during the harvest season. The vast majority of farmers in Brazil do not have adequate on farm storage for their crop, so they must rely on trucking companies to haul their grain to the grain elevators while it is being harvested. If there are no trucks available, then harvesting must be halted until more trucks become available.

The highway system in Brazil is little improved over last year when huge lines of trucks waiting to unload grain were many kilometers long.